As of May 27, 2025, Okta Inc has a Discounted Cash Flow (DCF) derived fair value of $2.79 per share. With the current market price at $123.72, this represents a potential upside of -97.7%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $2.79 |
| Potential Upside (5-year) | -112.1% |
| Potential Upside (10-year) | -97.7% |
| Discount Rate (WACC) | 6.7% - 8.9% |
Revenue is projected to grow from $2610 million in 01-2025 to $10671 million by 01-2035, representing a compound annual growth rate of approximately 15.1%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 01-2025 | 2610 | 15% |
| 01-2026 | 2749 | 5% |
| 01-2027 | 3496 | 27% |
| 01-2028 | 4330 | 24% |
| 01-2029 | 5065 | 17% |
| 01-2030 | 5769 | 14% |
| 01-2031 | 6619 | 15% |
| 01-2032 | 7582 | 15% |
| 01-2033 | 8549 | 13% |
| 01-2034 | 9601 | 12% |
| 01-2035 | 10671 | 11% |
Net profit margin is expected to improve from 1% in 01-2025 to 8% by 01-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 01-2025 | 28 | 1% |
| 01-2026 | 80 | 3% |
| 01-2027 | 140 | 4% |
| 01-2028 | 219 | 5% |
| 01-2029 | 306 | 6% |
| 01-2030 | 403 | 7% |
| 01-2031 | 475 | 7% |
| 01-2032 | 558 | 7% |
| 01-2033 | 644 | 8% |
| 01-2034 | 740 | 8% |
| 01-2035 | 841 | 8% |
with a 5-year average of $20 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 01-2026 | 24 |
| 01-2027 | 29 |
| 01-2028 | 36 |
| 01-2029 | 44 |
| 01-2030 | 55 |
| 01-2031 | 65 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 90 |
| Days Inventory | 0 |
| Days Payables | 8 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | (2) | 1 | 35 | 61 | (99) |
| 2027 | 37 | 2 | 45 | 170 | (181) |
| 2028 | 91 | 4 | 56 | 197 | (166) |
| 2029 | 160 | 5 | 65 | 186 | (97) |
| 2030 | 243 | 7 | 74 | 166 | (5) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -112.1% |
| 10-Year DCF (Growth) | 2.79 | -97.7% |
| 5-Year DCF (EBITDA) | 7.18 | -94.2% |
| 10-Year DCF (EBITDA) | 20.66 | -83.3% |
Is Okta Inc (OKTA) a buy or a sell? Okta Inc is definitely a sell. Based on our DCF analysis, Okta Inc (OKTA) appears to be overvalued with upside potential of -97.7%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $123.72.